Recovered Paper Market Update

Unlike with most other scrap commodities, China remains the largest market for U.S. export sales of recovered paper and fiber. According to U.S. Census Bureau trade data, the U.S. exported nearly $808 million of recovered paper to mainland China during Jan-Sep 2019, following by India ($385 million), Mexico ($236 million), Canada ($125 million) and South Korea ($116 million). Overall, U.S. recovered paper exports during the first 9 months were down 6.5% by value year-on-year to $2.2 billion and were down 6.7% by volume to 13.0 million metric tons (=14.3 million short tons).


U.S. Exports of Recovered Paper and Fiber by Major Destination
Metric tons

US Exports of Recovered Paper
By grade, OCC exports have had the worst performance this year, declining 7% by volume (-593,000 metric tons) to 7.5 million million tons, followed by printed news (-376,000 mt) and mixed paper (-89,000 mt). In contrast, U.S. exports of pulp substitutes and high-grade deinking grades have posted net gains of 15,000 tons and 63,000 tons, respectively, so far this year.

US Recovered Paper and Fiber

While corrugated exports are “only” down 7 percent by volume for the year-to-date, the monthly volumes have been slowing over the course of the year. As compared to January 2019, when the U.S. exported 922,000 metric tons of corrugated, by September the volume was down to 738,000 tons amid lighter loadings for China, India, and other key markets. For comparison’s sake, the Sep 2019 corrugated exports were down 27% from the more than 1 million tons shipped in Sep 2018.

Monthly US Corrugated Exposted

The slower export shipments were compounded by diminished domestic demand for OCC. The AF&PA estimates U.S. consumption of OCC was down 2% year-on-year in October and off 4% for the year-to-date. In contrast, domestic mixed paper consumption increased 7% Y-o-Y in October. As a result, AF&PA estimates total U.S. recovered paper consumption in October 2019 totaled 2.722 million tons, down 1% as compared to consumption in October 2018. For the year-to-date (Jan-Oct), U.S. recovered paper consumption is down 3% as compared to the corresponding period last year, which has translated into lower prices this year.

Recovered Paper Value

In corporate news, RISI has reported that:

  • WestRock is closing its Newark, NJ, corrugated plant, affecting more than 100 employees, reports in New Jersey said. "We had extra capacity in some of our other facilities, and in order to stay competitive, we are moving production to some of those facilities," a company official told local media. "The decision to close this plant … is a strategic decision based on an analysis of the profitability, capacity, and future potential of the plants in this area," the company was quoted as saying.
  • Pratt Industries' recycling subsidiary {opened} its 20th US material recovery facility (MRF) on Nov. 1, a 40,000-ft2 plant in Houston that will work with the converting plant Pratt already has in that Texas city as the company sees continued growth in its corrugated box business in the Southwest, a company official told Fastmarkets RISI's PPI Pulp & Paper Week on Oct. 29. Pratt Industries is the largest 100% recycled packaging company in the USA. The Houston MRF will bale and shred between 2,000-4,000 tons/month of recovered fiber, including old corrugated containers (OCC), mixed paper, and high grades from nearby commercial and industrial accounts, which will then be sold back to Pratt's Shreveport, LA, paper mill. Pratt Recycling also has a MRF in Shreveport.”
  • ND Paper's Fairmont, WV, mill is producing a mixed paper pulp, or recycled pulp, of solely mixed paper, with other North American mills and a waste management company also considering this move, several contacts confirmed in the last week. The West Virginia mill's recycled pulp lines first ran in early 2019 on a considerable amount of mixed paper and old corrugated containers (OCC). The mill had shipped this recycled pulp to China by at least late February. Today, the former Resolute Forest Products market deinked pulp mill has exported the mixed paper pulp to China, contacts said.

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